Court Opinion

ID: 4660435
Source: CourtListenerOpinion
Date Created: 2021-02-16 18:00:32.50168+00
Date Added: 2024-06-11T09:08:50.685456
License: Public Domain

NOT PRECEDENTIAL

                        UNITED STATES COURT OF APPEALS
                             FOR THE THIRD CIRCUIT
                                  ___________

                                       No. 20-1291
                                       __________

                                   HESHAM ISMAIL,
                                             Appellant

                                             v.

       INTERSTATE RESOURCES INC; UNITED CORSTACK LLC, (Successors to
    Interstate Resources), TDBA DH Smith Reading Mill, TDBA Interstate Resources Inc;
     DS SMITH HOLDINGS INC, (Successors to Interstate Resources), TDBA DS Smith
     Packaging Reading and Interstate Resources, TDBA DS Smith Reading Mill, TDBA
       United Corstack LLC, TDBA Interstate Resources; INTERSTATE CONTAINER
    READING LLC, (Successors to Interstate Resources), TDBA DS Smith Reading Mill,
                       TDBA Interstate Resources Inc; DS SMITH PLC
                         ____________________________________

                     On Appeal from the United States District Court
                         for the Eastern District of Pennsylvania
                         (D.C. Civil Action No. 5-18-cv-02881)
                      District Judge: Honorable Jeffrey L. Schmehl
                      ____________________________________

                     Submitted Pursuant to Third Circuit LAR 34.1(a)
                                   February 12, 2021

                Before: CHAGARES, PHIPPS and COWEN, Circuit Judges

                            (Opinion filed February 16, 2021)
                                      ___________

                                        OPINION*
                                       ___________

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
PER CURIAM

       Pro se appellant Hesham Ismail appeals from the District Court’s order enforcing a

settlement agreement with his former employer, Interstate Resources, Inc., and its

corporate affiliates (collectively, the “Defendants”). For the reasons set forth below, we

will affirm the District Court’s judgment.

                                             I.

       Because we write primarily for the parties, we will recite only the facts necessary

for our discussion. In July 2018, Ismail filed a complaint in the District Court against the

Defendants, raising employment discrimination claims under Title VII of the Civil Rights

Act and the Pennsylvania Human Relations Act. The case was referred to the Magistrate

Judge, who conducted a settlement conference on April 3, 2019. At the conclusion of the

four-hour conference, counsel for Ismail and counsel for the Defendants stated that they

had reached an oral settlement. The parties agreed to the terms of the settlement on the

record and expressed their intention to reduce the agreed-upon terms to a writing. The

Magistrate Judge issued an order dismissing the case as settled but retaining jurisdiction

for purposes of enforcing the settlement agreement. See generally Kokkonen v. Guardian

Life Ins. Co. of Am., 511 U.S. 375, 379–81 (1994).

       After the agreement was put in writing and reviewed by the parties’ attorneys,

Ismail refused to sign it. Ismail’s counsel and counsel for the Defendants moved to

enforce the settlement agreement. The Magistrate Judge held a hearing and took

testimony from Ismail. He testified that, based on his conversations with unidentified

friends who are criminal attorneys, he believes that his attorney misled him to settle for

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an amount that was too low. He primarily alleged that his attorney misinformed him

regarding his ability to recover certain damages and attorney’s fees.

       The Magistrate Judge issued a report and recommendation that the settlement

agreement be enforced in accordance with the terms of the written agreement that Ismail

had refused to sign. On December 19, 2019, after reviewing the record and Ismail’s

objections de novo, the District Court adopted the recommendation and ordered that the

settlement agreement be enforced. Ismail then purported to exercise Sections 24 and 25

of the unsigned written agreement, which stated that he had 21 days to consider the

agreement and that he could revoke the agreement within seven days of signing it. Ismail

filed various requests that the case be reinstated based on his alleged revocation.

       The District Court denied Ismail’s requests to reinstate the case. The District

Court explained that it had ordered the enforcement of the April 3, 2019 oral settlement

agreement and that Sections 24 and 25 of the unexecuted written agreement were not a

part of the settlement. On January 6, 2020, the District Court amended its December 19,

2019 order to clarify that it was ordering the enforcement of the settlement agreement in

accordance with the terms reached on the record on April 3. Ismail then sent emails to

the District Judge challenging the amended order and again requesting that the case be

reinstated. On January 27, 2020, the District Court denied Ismail’s requests. Ismail filed

his notice of appeal on February 6, 2020.

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                                             II.

       We have jurisdiction under 28 U.S.C. § 1291.1 “This court applies plenary review

to a district court’s construction of settlement agreements, but should review a district

court’s interpretation of settlement agreements, as well as any underlying factual

findings, for clear error.” Coltec Indus., Inc. v. Hobgood, 280 F.3d 262, 269 (3d Cir.

2002); see also Tiernan v. Devoe, 923 F.2d 1024, 1031–32 (3d Cir. 1991).2

                                             III.

       We agree with the District Court that the parties entered a binding and enforceable

settlement agreement pursuant to the terms placed on the record at the April 3, 2019

settlement conference. “The enforceability of settlement agreements is governed by

principles of contract law.” Mazzella v. Koken, 739 A.2d 531, 536 (Pa. 1999). “As with

any contract, it is essential to the enforceability of a settlement agreement that the minds

of the parties should meet upon all the terms, as well as the subject-matter, of the

1
  Because the District Court’s January 6, 2020 order resolved a substantive ambiguity in
the original judgment, the 30-day time period to appeal began anew. See F.T.C. v.
Minneapolis-Honeywell Regul. Co., 344 U.S. 206, 211–12 (1952) (explaining that an
order that substantively changes, or resolves a genuine ambiguity in, a judgment
previously rendered begins anew the time period for appeal); Keith v. Truck Stops Corp.
of Am., 909 F.2d 743, 746 (3d Cir. 1990) (“An order substantively changing a judgment
constitutes a new judgment with its own time for appeal at least where the change is the
subject matter to be reviewed.”). We construe Ismail’s challenges to the January 6 order
as a timely motion for reconsideration, which the District Court denied in its January 27,
2020 order. Ismail’s timely notice of appeal from that order “brings up the underlying
judgment for review.” See Long v. Atl. City Police Dep’t, 670 F.3d 436, 446 n.20 (3d
Cir. 2012) (quotation marks and citations omitted).
2
  Under the circumstances here, we apply Pennsylvania law to the enforceability of the
settlement agreement. See Tiernan, 923 F.2d at 1032–33 & n.6.; see also Three Rivers
Motors Co. v. Ford Motor Co., 522 F.2d 885, 889 (3d Cir. 1975).

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[agreement].” Id. (quotation marks and citation omitted). “An agreement to settle a

lawsuit, voluntarily entered into, is binding upon the parties, whether or not made in the

presence of the Court, and even in the absence of a writing.” Cooper-Jarrett, Inc. v. Cent.

Transp., Inc., 726 F.2d 93, 96 (3d Cir. 1984) (quotation marks and citation omitted).

       Here, the transcript from the settlement conference reflects that Ismail accepted

the Defendants’ offer to settle the case on a set of definite terms that included valid

consideration. See Channel Home Ctrs., Div. of Grace Retail Corp. v. Grossman, 795

F.2d 291, 299 (3d Cir. 1986) (“Applying Pennsylvania law, then, we must ask (1)

whether both parties manifested an intention to be bound by the agreement; (2) whether

the terms of the agreement are sufficiently definite to be enforced; and (3) whether there

was consideration.”). During a colloquy with the Magistrate Judge, Ismail affirmed that

he had adequate time to discuss the matter with his counsel and that he felt he was well

represented by counsel. Ismail said he understood that accepting the settlement would

release his claims against the Defendants, that the settlement amount included all costs

and counsel fees, and that he would not be entitled to make a separate request for

reimbursement of those fees. Ismail stated that he had no questions and he explicitly

agreed to the terms of the settlement.

       Ismail’s arguments to invalidate the settlement are meritless. There is no support

in the record for his contention that he was misinformed and misled into settling the case

on the basis of fraud sufficient to invalidate the agreement. There is no evidence that

Ismail was misinformed regarding his likelihood of recovering damages in excess of the

settlement amount, and merely “[h]aving second thoughts about the results of a valid

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settlement agreement does not justify setting [it] aside.” Hensley v. Alcon Labs., Inc.,

277 F.3d 535, 540 (4th Cir. 2002) (alteration and internal quotation marks omitted).

Ismail’s engagement letter with counsel and his colloquy with the Magistrate Judge fully

informed him regarding the issue of attorney’s fees.

       Ismail’s failure to sign the settlement documents does not invalidate the settlement

agreement. When the parties have agreed on the essential terms of a contract, the fact

that they intend to formalize their agreement in writing but have not yet done so does not

prevent enforcement. See Grossman, 795 F.2d at 298–300; see also Am. Eagle Outfitters

v. Lyle & Scott Ltd., 584 F.3d 575, 582 (3d Cir. 2009) (explaining that “parties may bind

themselves contractually although they intend, at some later date, to draft a more formal

document” (quotation marks and citation omitted)). Here, the settlement documents were

exchanged to memorialize the terms of an already-reached agreement, and Ismail’s

obligation to sign the documents was part of what he had already agreed to do.

       Further, there is no basis for Ismail to revoke the settlement agreement pursuant to

Sections 24 or 25 of the unexecuted written documents. The District Court properly

determined that the oral agreement reached on April 3, 2019, established the terms of the

settlement. The transcript from the settlement conference makes clear that the material

terms of the parties’ agreement did not contemplate revocation in any form. Ismail does

not cite any legal authority supporting his claim that he had the right to rely on provisions

in unexecuted settlement documents in order to cancel a valid and enforceable oral

agreement that the parties had previously reached.

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      Finally, the District Court properly denied Ismail’s motion for reconsideration,

which was based on a repetition of his meritless arguments to invalidate or revoke the

settlement agreement. See generally Max’s Seafood Cafe ex rel. Lou-Ann, Inc. v.

Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). We have carefully reviewed the rest of

Ismail’s arguments on appeal, and we find them to be meritless.

      Accordingly, we will affirm the judgment of the District Court.

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