Court Opinion

ID: 1013254
Source: CourtListenerOpinion
Date Created: 2013-07-04 20:58:03.615965+00
Date Added: 2024-06-11T15:26:47.128932
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

KIMBERLY STEWART,                     
               Plaintiff-Appellant,
                 v.
COYNE TEXTILE SERVICES; COYNE                    No. 03-1936
INTERNATIONAL ENTERPRISES,
CORPORATION,
              Defendants-Appellees.
                                      
            Appeal from the United States District Court
     for the Southern District of West Virginia, at Huntington.
                Robert C. Chambers, District Judge.
                          (CA-02-198-3)

                      Argued: February 24, 2004

                       Decided: May 13, 2004

        Before MOTZ and TRAXLER, Circuit Judges, and
               HAMILTON, Senior Circuit Judge.

Vacated and remanded by unpublished per curiam opinion.

                             COUNSEL

ARGUED: Nancy S. Brewer, LEGAL AID OF WEST VIRGINIA,
Huntington, West Virginia, for Appellant. Michael Edward Estep,
JENKINS FENSTERMAKER, P.L.L.C., Huntington, West Virginia,
for Appellees. ON BRIEF: Thomas E. Scarr, JENKINS FENSTER-
MAKER, P.L.L.C., Huntington, West Virginia, for Appellees.
2                 STEWART v. COYNE TEXTILE SERVICES
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                              OPINION

PER CURIAM:

   Plaintiff Kimberly Stewart brought a Family and Medical Leave
Act action against her employer, Coyne Textile Services. At some
point in the litigation, the parties reached an oral settlement. Shortly
thereafter, but before the settlement was reduced to writing, Coyne
Textile Services sought suspension of its settlement obligations as a
result of Stewart’s alleged breach of confidentiality. The district court
found a breach of confidentiality and ordered a suspension of a signif-
icant portion of the settlement. Stewart appeals, maintaining that the
district court erred in its resolution of the settlement agreement dis-
pute. We vacate and remand.

                                   I.

   On March 7, 2002, Stewart filed a complaint asserting claims aris-
ing out of the termination of her employment with Coyne. After
extensive discovery, the district court denied the parties’ summary
judgment motions, and the matter was scheduled to go to trial on June
10, 2003. The parties reached a confidential oral settlement of the
matter on June 9, 2003.

   At the time of settlement, it was clear that, although the parties had
reached a binding settlement, the parties intended to reduce the agree-
ment to writing in the near future. The basic terms of the settlement
included: (1) reinstatement of Stewart to the same or a similar posi-
tion; and (2) a settlement payment, part of which would be paid in a
lump sum at the time of the execution of the settlement documents,
with the balance to be paid in installments over a ten-month period.

   Although the precise details are now disputed, the parties also
reached some form of an agreement that the terms of the settlement
would be strictly confidential. The settlement terms also appear to
                   STEWART v. COYNE TEXTILE SERVICES                        3
have included an agreement that a portion of the total settlement pay-
ment would reflect and constitute back pay while the balance would
represent consideration for Stewart’s confidentiality agreement. Spe-
cifically, some portion the installment payments would be forfeited if
Stewart violated the confidentiality provisions.

   Coyne agreed to reinstate Stewart immediately, prior to the execu-
tion of the written settlement agreement. Then, on June 16, 2003,
after learning that the details of the settlement had been made public,1
Coyne filed a motion to enforce the settlement and award sanctions.

   The district court held a plenary evidentiary hearing on June 19,
2003, and determined that Stewart had breached the confidentiality
agreement. As a result, the district court decided that Coyne was enti-
tled to suspend a portion of the agreed upon settlement payment. Spe-
cifically, the district court found that one half of the total settlement
amount should be allocated to lost wages and the other half to the
confidentiality agreement. Accordingly, the court held that Coyne was
entitled to suspend the payment of one half of the total settlement
amount. The rest of the balance, including the lump sum payment,
would remain in effect, and Coyne was ordered to comply with all
other terms of the settlement.2 Stewart then filed this appeal.

                                     II.

    It is well settled that a district court retains inherent jurisdiction and
equitable power to enforce agreements entered into in settlement of
litigation before that court. Millner v. Norfolk & Western Ry., 643
F.2d 1005, 1009 (4th Cir. 1981); Wood v. Virginia Hauling Co., 528
F.2d 423, 425 (4th Cir. 1975). However, the district court only retains
the power to enforce complete settlement agreements; it does not have
  1
    The court later found that the breach of confidentiality occurred on
June 10, 2003, one day after the settlement was reached.
  2
    After this hearing, a written agreement was formally executed on July
24, 2003. It is unclear how to characterize this writing — as either a
memorialization of the court’s order or of the original settlement agree-
ment. However, we need not consider the question because this writing
suffers from the same defect as the oral agreement: parties may not cede
resolution of material terms to the court.
4                 STEWART v. COYNE TEXTILE SERVICES
the power to sit as a final arbiter and impose a settlement agreement
where there was never a meeting of the parties’ minds. Where there
has been no meeting of the minds sufficient to form a complete settle-
ment agreement, any partial performance of the settlement agreement
must be rescinded and the case must be restored to the docket for trial.
Wood, 528 F.2d at 425.

   Thus, to exercise its inherent power to enforce a settlement, a dis-
trict court must find that the parties reached a complete agreement
and must be able to determine the terms and conditions of that agree-
ment. Moore v. Beaufort County, 936 F.2d 159, 162 (4th Cir. 1991).
"If there is a factual dispute over the existence of an agreement . . .
or over the agreement’s terms, the district court may not enforce a set-
tlement agreement summarily." Hensley v. Alcon Labs., Inc., 277 F.3d
535, 541 (4th Cir. 2002). Instead, when such factual disputes arise,
the court must "conduct a plenary evidentiary hearing in order to
resolve that dispute," Millner, 643 F.2d at 1009, and make findings
on the issues in dispute, Ozyagcilar v. Davis, 701 F.2d 306, 308 (4th
Cir. 1983). If a district court concludes that no settlement agreement
was reached or that agreement was not reached on all the material
terms, then it must deny enforcement.

   In this case, it is clear that the parties attempted to settle Stewart’s
claims. However, while the parties agree as to the existence of the set-
tlement agreement, there is a factual dispute over the terms of the
agreement. Specifically, the parties dispute how the overall payment
was to be apportioned between back pay and the penalty for breach
of confidentiality.

   Because the parties disagreed over the terms of the settlement
agreement, the district court could not summarily enforce the agree-
ment. Accordingly, the district court properly held a plenary evidenti-
ary hearing and made certain findings of fact. The district court did
not make a finding of fact, however, as to how the parties had agreed
the payments were to be apportioned and as to what type of penalty
the parties had agreed would be levied if the confidentiality agree-
ment was breached. Rather, the district court simply stated: "I think
the fairest resolution is for the Court to consider that of the [total pay-
ment amount], half was to be paid, essentially, for lost wages, the
other half for confidentiality." J.A. 81. Thus, the district court
                 STEWART v. COYNE TEXTILE SERVICES                   5
imposed a remedy that it believed was fair, without ever determining
as a factual matter what remedy had been agreed upon by the parties.

   Because the district court did not make the requisite findings of
fact, it is impossible to determine whether the agreement should have
been enforced, how it should have been enforced, and whether there
was an actual breach. Thus, we vacate the district court’s order and
remand the case for resolution of these factual questions, if possible,
and for any other proceedings that may be necessary.

                                       VACATED AND REMANDED